Carbacid set to breach deadline for BOC takeover

BOC, which has operated in Kenya since 1940, produces and supplies industrial, medical and special gases. FILE PHOTO | NMG

By VICTOR JUMA
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Summary

• Carbacid had signed an agreement with the multinational which committed to sell its 65.38 percent stake in BOC provided the deal is completed by end of July.
• The agreement anchored Carbacid and investment firm Aksaya’s joint bid to buy 100 percent stake in the Nairobi-based industrial and medical gases manufacturer for Sh1.2 billion or Sh63.5 per share.

Carbacid is set to breach tomorrow’s deadline for buying a majority stake in BOC Kenya

, with the company expected to extend its agreement with the target’s top shareholder BOC Holdings.

Carbacid had signed an agreement with the multinational which committed to sell its 65.38 percent stake in BOC provided the deal is completed by end of July.

The agreement anchored Carbacid and investment firm Aksaya’s joint bid to buy 100 percent stake in the Nairobi-based industrial and medical gases manufacturer for Sh1.2 billion or Sh63.5 per share.

The offerors are now expected to extend the buyout timeline after a series of legal challenges delayed the transaction.

“The conditions of the irrevocable undertaking are … completion of the offer occurs by July 31, 2021 or such later date as may be agreed in writing by the co-offerors and BOC Holdings,” reads part of the terms of the deal agreement between BOC Holdings and the acquirers.

The proposed transaction, which was announced in November last year, has been delayed by legal challenges by minority shareholders who have filed cases before courts and the Capital Markets Tribunal (CMT).

Conclusion of the deal is months away, taking into account resolution of the legal battles and customary procedures including recording acceptances from BOC shareholders and dispatching payments.

Former BOC Kenya chairman Ngugi Kiuna filed an application at the tribunal on March 1, arguing that the offer undervalues the medical and industrial gases manufacturer by a large margin.

Dyer and Blair Investment Bank, the independent financial advisor hired by BOC to review Carbacid’s offer, said the company is worth at least Sh91.76 per share or an aggregate of Sh1.7 billion.

Mr Kiuna’s suit automatically stopped the transaction, according to the law.

Another group of seven BOC’s minority investors subsequently went to the High Court, asking it to stop proceedings at the tribunal and inherit the dispute.

The controversy marks the latest twist in the history of the two Nairobi Securities Exchange-listed firms.

Carbacid was itself a takeover target of BOC in 2005 but the proposed transaction collapsed in October 2009 on regulatory roadblocks.